Rent-to-Buy (RTB) rents household appliances and furniture. Its standard contract gives customers the option of converting...
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Rent-to-Buy (RTB) rents household appliances and furniture. Its standard contract gives customers the option of converting the rental into a purchase. For washing machines, RTB signs 1,000 new leases every month. The rental term is 3 months. A contract ends in one of the following three ways: c) The lease ends early, and the customer purchases the washing machine after 2 months of renting. (This happens with 20% of leases.) The lease goes the full 3 months, and the customer purchases the washing machine. (This happens with 8% of leases.) The lease goes the full 3 months, and the customer returns the washing machine to RTB. RTB regularly buys new mashing machine to offset units sold to customers or those deemed to be in too poor condition to rent again (those new machines first come to its warehouse before leased out to customers). The washing machines in too poor condition to rent again retire from the warehouse. To provide fast service to new rental customers, RTBs policy is to hold an inventory of 1,500 washing machines at its warehouse. When the customers return the washing machine, it comes back to the warehouse. a) What is the average number of washing machines that RTB owns? b) RTB charges $50 per month for renting a washing machine. The purchase price depends on how long the customer has rented the machine. Customers buying after 2 months of renting pay $400. Those buying after renting for three months pay $350. What is RTBs monthly revenue? When a washing machine is returned to RTB, it is inspected and sold for scrap if it is not in good condition. On average, 220 washing machines are scrapped every month. To keep its fleet of washing machines at a constant size, RTB buys enough units each month to replace both those bought by customers and those that are scrapped. How long does on average RTB own a washing machine? Rent-to-Buy (RTB) rents household appliances and furniture. Its standard contract gives customers the option of converting the rental into a purchase. For washing machines, RTB signs 1,000 new leases every month. The rental term is 3 months. A contract ends in one of the following three ways: c) The lease ends early, and the customer purchases the washing machine after 2 months of renting. (This happens with 20% of leases.) The lease goes the full 3 months, and the customer purchases the washing machine. (This happens with 8% of leases.) The lease goes the full 3 months, and the customer returns the washing machine to RTB. RTB regularly buys new mashing machine to offset units sold to customers or those deemed to be in too poor condition to rent again (those new machines first come to its warehouse before leased out to customers). The washing machines in too poor condition to rent again retire from the warehouse. To provide fast service to new rental customers, RTBs policy is to hold an inventory of 1,500 washing machines at its warehouse. When the customers return the washing machine, it comes back to the warehouse. a) What is the average number of washing machines that RTB owns? b) RTB charges $50 per month for renting a washing machine. The purchase price depends on how long the customer has rented the machine. Customers buying after 2 months of renting pay $400. Those buying after renting for three months pay $350. What is RTBs monthly revenue? When a washing machine is returned to RTB, it is inspected and sold for scrap if it is not in good condition. On average, 220 washing machines are scrapped every month. To keep its fleet of washing machines at a constant size, RTB buys enough units each month to replace both those bought by customers and those that are scrapped. How long does on average RTB own a washing machine?
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Related Book For
Intermediate Accounting
ISBN: 978-0071339476
Volume 1, 6th Edition
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod Dick I
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